Economist comment: Reaction to 2021 House Price Index figures
Commenting on today’s HM Land Registry HPI figures for 2021, Nitesh Patel, Strategic Economist at Yorkshire Building Society, said:
House price growth ended 2021 on a high growing by 10.8% leading to an average house price of £274,712 In the UK – in cash terms that is an average increase of £26,278.
Interestingly the picture has changed at a regional level, for most of the year price growth had been strongest in the North of England however by December the South West had the largest annual price increase of 13.6% followed by the South East with 12.6%.
A key challenge in the current housing market is the lack of supply of homes for sale whilst demand continues to remain strong – which perhaps explains the strong price performance in southern England. For most of last year the Stamp Duty holiday had provided a boost but even after that ended prices have continued to rise. Low borrowing costs and a strong jobs market are key drivers but in the coming months a further deterioration in household finances may take some of the heat out of the market.